Lubna says rents to be blamed for high inflation rate

Abu Dhabi: The high cost of housing is the major drive behind the high inflation rate in the UAE, according to Shaikha Lubna Al Qasimi, UAE Minister of Economy.

"Inflation has become one of the cabinet's top priorities, but at the federal level we have to work closely with the emirate level authorities such as municipalities and economic departments," Lubna told the audience.

Though the hike of foodstuff prices during Ramadan has come to a balance, yet the major item of the consumer spending in the UAE is the housing or rents, according to many recent reports by international and local institutions.

"The housing market is not set at the federal level, as it is a concern of every individual emirate, and recently both Abu Dhabi and Dubai demonstrated very stringent rules that were very effective in curbing these rising rents, and this will continue," she said, explaining that the supply side will be balanced once the many developments taking place are completed.

Another major factor for the increasing prices according to Lubna is the increasing fuel prices. "However, this is worldwide problem, as this affects the cost of transport, hence increase the prices of commodities," she explained.

Construction, which is the fastest growing sector in the UAE in terms of economic growth, has been also affected by the demonstrations and riots of workers.

"There were more than 11,000 construction workers who demonstrated last year, and there demands were addressed by the ministry of labour. This year there were only 8,000 workers, and if we consider that this labour force exceeds 1 million workers, then these figures do not represent the overall number. It is a small number, yet a number that we should address," she commented.